School districts set to share sobering news

Posted: February 16, 2011

The budgets that most Pennsylvania school boards must approve by Wednesday are only preliminary, a best guess at what's on the fiscal horizon for their districts, and taxpayers, in the 2011-12 school year.

At the moment, it's trouble.

Montgomery County's Spring-Ford Area School District, for instance, has penciled in a 7.6 percent tax increase in the face of an anticipated $10.4 million shortfall. That would still leave the board scraping for $4.2 million in savings or additional revenues.

The Cheltenham district, also in Montgomery County, has projected a 6.5 percent tax hike on top of $2 million in personnel cuts.

To tackle an $8.8 million deficit, Chester County's Tredyffrin/Easttown district is proposing a 2.8 percent tax increase and possible economies ranging from outsourced custodial service to heavier course loads for teachers.

The preliminary budget in the Marple Newtown district in Delaware County calls for raising taxes 7.79 percent to close a relatively modest $1.4 million gap.

Although final balanced budgets for the next school year have to be in place by the end of June, boards must begin deliberating in January and approve interim spending plans by Feb. 16 - a requirement of Act One, the state's 2006 tax-relief law.

The Philadelphia School District is exempt from that timeline. Its preliminary budget is due by April 30, with the real deal locked in by the end of May. However, district officials have said they expect a deficit of more than $400 million.

Preliminary budgets, school boards acknowledge, are something of a docudrama - showing relatively high spending and tax numbers that typically are whittled down in the ensuing four months. They are to be passed before March 8, when Gov. Corbett will lay out his spending plan for Pennsylvania, which could have substantial effects on district budgets. All of the area's 63 suburban school systems get at least 10 percent of their funding from Harrisburg; 22 get more than one-quarter. Philadelphia counts on state and federal money for about 65 percent.

Corbett, facing an estimated deficit of more than $4 billion, almost certainly will call for cuts in education aid. How deep, no one knows.

Combine that with a rocky economy; with teacher salaries and medical benefits, two of the largest budget items, that are locked in by multi-year labor agreements; with depressed revenues from property reassessments, slow home sales, and low interest rates - and 2011-12 is sure to be rough going.

Under Act One, districts must keep their tax increases within inflation-related limits. For the next school year, the law sets a maximum 1.4 percent hike for 44 area districts. The ceiling is higher for 19 because they are poorer; for instance, 1.6 percent for Montgomery County's Perkiomen Valley district and 2.3 percent for Chester Upland in Delaware County.

The tax-cap provision has many loopholes, however. Districts with high costs in 10 spending categories, such as special education and pensions, may raise taxes to offset those expenditures. And in their preliminary budgets at least, most take advantage of that option. "But in a few months, the numbers will be much lower, more realistic," said Marple Newtown business administrator Joseph Driscoll.

Containing spending without doing damage to children's education is more and more challenging, board members and administrators say.

For the second year in a row, Tredyffrin/Easttown is grappling with a large budget gap. Last year, it had to find $9.25 million in economies or added revenues. It did so by, among other things, eliminating 23 professional staff, raising taxes 2.9 percent, and using $1.4 million in savings.

After having dug that deep, balancing the budget is even "harder this year," School Board President Karen Cruickshank told the audience at a board meeting last month.

Tredyffrin/Easttown has released a three-level list of possible cuts. Level One, with such measures as changing the prescription drug provider, would be easiest to accomplish and have the least direct impact on students. The problem? Even if all Level One economies were implemented, the district would still be about $4 million short.

Level Two and Three cuts include outsourcing custodial services, increasing teachers' course loads, and reducing the number of courses students may take per semester.

Those "could really change the way education looks," Cruickshank said. "We ought to be really careful about that."

A few districts, including Morrisville, Pennridge, and Pennsbury in Bucks County, and Rose Tree-Media in Delaware County, already have committed to keeping their tax increases within their Act One inflation "indexes," though the spending exceptions would be available to them.

The West Chester Area district voted, 5-4, to stay at or below 1.4 percent. School board member Sean Carpenter, who voted with the majority, said that "in economic times like ours, we should be trying to mitigate as much pressure on the taxpayers as possible. The taxpayers should see that school districts are sharing the pain."

Asked how the district, with a $3.8 million shortfall, will manage, he said: "I am hopeful that eventually, revenues will come back. But in the meantime, people like me are going to be facing difficult choices."

In the Upper Merion School District in Montgomery County, the board asked voters last month to decide on a $34 million bond to finance the renovation and expansion of a 44-year-old elementary school, bought school buses, and financed some repairs.

Had the measure been approved, the new taxes needed to pay off the bond would not have counted toward the district's Act One tax limit. The proposal was defeated, by 151 votes of 4,147 cast. As a result, the district may have to "to cut bone, not fat," in its next budget, said school board member David Karen. "That is not a situation that allows us to educate our children in the way we should."

In many districts, deep divisions exist between residents, many of them parents, who are willing to pay more in the expectation that children will get a better education, and those who want lower taxes.

At a Tredyffrin/Easttown meeting last month, parent Claire Witzleben told the board, "If we're going to have excellent schools, we have to pay for them. So I'm a taxpayer who wants you to raise my taxes."

But district resident and business owner John Lieberman countered that while the proposed 2.8 percent tax hike "sounds minimal, our revenues are going down. . . . What sounds like not a lot is a lot. . . . I think we just have to spend less."


Contact staff writer Dan Hardy at 610-313-8134 or dhardy@phillynews.com.

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